sharing economy

The sharing economy, also known as collaborative consumption, is a trending business concept that highlights the ability (and perhaps the preference) for individuals to rent or borrow goods rather than buy and own them.

Sharing economy, also known as collaborative consumption, is a trending business concept that highlights the ability (and perhaps the preference) for individuals to rent or borrow goods rather than buy and own them.

The most important criteria for a sharing economy is that it allows individuals to monetize assets that are not being fully utilized. In the past, people discovered and shared such assets through classified ads in a local newspaper or by word of mouth. With the advent of the Internet, pervasive computing and the ease of mobile payments (m-payments), however, that began to change. 

The growing number of mobile platforms that effectively connect people who have certain goods, services and/or skills with those who don't, is making it possible for ordinary people to advertise and sell goods and services that used to be provided by full-time businesses. Perhaps the most well-known example of the sharing economy is eBay, a site that provides customers with an easy way to become sellers. Ebay is also known for its secure, easy-to-use payment system and mechanisms that allow members to evaluate trust -- two other important criteria for the sharing economy. 

Examples of sustainable startup businesses that have grown out of the sharing economy include Zipcar, a car-sharing service that allows members to rent vehicles by the hour and Airbnb, a peer-to-peer marketplace for lodging. 

See also: Square, PayPal, wikinomics

This was first published in September 2013

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